All eyes are on the E-Z. Nick Kennedy is most qualified to discuss that region but he is still recovering from a nasty bike accident, one which would have taken most of us out.
In a sketch Nov/9 Nick set out the combined fundamental and technical case for a weaker Euro (then 1.3553), the first aim to re-test the Oct/11 low of 1.3146, then the next objective, “..to crack the Nov 2010/Jan 2011 lows in the 1.2870/2970 zone..” After that, to consider the longer-term targets sub 1.2000, “..which is where we think the end-game should...lead to.”
The currency ran counter for just a few days after Nov/9 on E-Z posturing, and then commenced to perform according to plan. The advice, “The ebb and flow of news from the Eurozone should continue to provide periods of volatility and we’d recommend using any short-term reprieve to add to short positions” was spot on.
From the US side, Thursday’s Claims print is the key release for the week given last week’s very encouraging read - a 3 ½ year low. Another result even close will send economists scurrying back to their desks in full revision mode.
Friday’s reports (Nov Durables, New Home Sales and Income) won’t deliver much impact one way or the other, our view; few will be looking anyway.
Robert Craven
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